"The Teton Dam Disaster, A Product of Three Failures of Government Institutions" by Russ Brown

The roots of the Teton Dam project were greed and tradition. The greed of irrigation interests had been a tradition for almost three-quarters of a century; it was a type of socialism that was attractive to nominally conservative Western farmers. The opportunity to get Federal money for personal enrichment was always a sufficient reason to make the welfare state socially acceptable.

As ever, that lust for a handout was facilitated by elected officials at
both the State and national level. Pork-barrel projects are the life-blood of politics; they serve the principal objective of almost all Western Senators and Congresspersons, i.e, getting re-elected. Pork has the added advantage of being bipartisan. With few exceptions, Republicans and Democrats cheerfully belly up to the trough. Environmental considerations are not even in last place when such projects are considered; they are out of sight.

The Bureau of Reclamation did everything that it could to serve the
pork-barrel constituency. Project justifications were enhanced by
overstated benefits and understated costs. In private industry, the
Bureau's practices would have been met with disbelief, occasional laughter, and indictments for fraud. In the industry of government, it produced nothing but happy faces and fat cats. Congressional passions were the Bureau's commands. Questions were socially and politically unacceptable.

The National Environmental Policy Act was supposed to require Federal
agencies to tell the truth, the whole truth, and nothing but the truth
about their projects. Projects didn't necessarily have to make sense from either an economic or environmental standpoint. But the mandated
Environmental Impact Statements were intended to provide Federal
decision-makers with a clear and honest picture of the proposed action,
possible alternatives, and consequences. The Federal Courts were supposed to provide an impartial judicial review of compliance with the law when needed. In the case of the Teton Dam, the Federal Court system failed too. The validity of the 14-page Final EIS was upheld in Federal District Court in Boise and in the Ninth Circuit Court of Appeals. The presiding judge in District Court was happy to exclude any testimony dealing with the failure of the BOR to include the required consideration of low-probability, high-hazard events, i.e., dam failure, in the description of potential environmental impacts. He ruled that the Teton Dam was both economically and physically sound. Perhaps he confused these concepts with the more pragmatic considerations of political soundness.

The Teton Dam project was a water-welfare-boondoggle. It destroyed a
precious resource, leaving behind the profaned remains. The Bureau of
Reclamation., which knew full well the fakery and sham built into the
program, failed to comply with even the procedural demands of the
NEPA. Exposure and independent analysis were the last thing the Bureau wanted.

The damming of the Teton River replaced a unique resource with a vulgar
one, living water with dead., and a natural jewel with an incipient mud
puddle. The failure of the Teton Dam added 11 deaths and an estimated $400 million damages in the downstream communities to the destruction of the river.

The matrix of deceit in the Teton project included inflated benefits for
irrigation and flood control and a myriad of deflated or omitted costs.
IRRIGATION: Benefits claimed for 37,000 acres--20,000 were already
irrigated.

Benefits calculated by comparison to the worst drought years in the history of the area. (1931-1937)

Although 70% of the cost of Phase I was allocated to irrigation, the
irrigators would have paid less than 10% of the cost.

FLOOD CONTROL: Benefits of $354, 600 per year claimed for an area with a history of flooding that could have, at best justified a benefit one-tenth as large. The Federal government could have saved a fortune by purchase of the farm-land that was occasionally flooded for a small fraction of the $100 million cost of the project. The BOR's flood control analysis never considered the probabilistic costs of dam failure in the benefit-cost analysis; such costs may have actually exceeded the actual flood control benefits. The Teton Dam project converted a
high-probability, low hazard resource into a high-risk environment.

INTEREST RATES: The ultimate fantasy in the economics of the Teton Dam was the interest rate used to estimate the costs. The Bureau calculated its costs using an interest rate of 3.25 percent at a time that the Federal government had to pay about 6% for the money that it borrowed. The actual costs were about $2,000,000 more per year. Even if the Bureau's faked benefits were used, the effect of using the actual interest costs would have made the project a guaranteed loser of more than 33 cents on the dollar invested. If the actual benefits were used, it would have lost more than 50 cents for every dollar invested. The benefit-cost ratio was less than 1.

The Bureau of Reclamation built a dam that destroyed a living river and
would have, at best, wasted tens of millions of dollars in the process. With the encouragement of irrigation interests, the collusion of
Congress, and the blessing of the Federal judiciary, the Bureau traded away an environmental treasure for a few pieces of silver...and we found that even the silver was counterfeit.